Shia police rampaged through a Sunni district in the north-western city of Tal Afar killing at least 33 people in the streets and in their homes in revenge for devastating car bombs in a nearby Shia neighborhood earlier in the day.

"Sadly it is true that Shia police carried out the killings in Tal Afar," Khasro Goran, the deputy governor of Mosul province where the city is situated, told me. He said the car bombs the previous day had killed 75 people and wounded 150, almost all of them Shia.

Mr Goran said the 3rd Iraqi Army Division, which is mainly Kurdish, had been sent to Tal Afar, a Turkoman city with a population of 80,000 divided between Shia and Sunni communities. A curfew has also been declared. To the west of Mosul on the road to the Syrian border the city has been the scene of fierce fighting in past between insurgents and the US army.

In March last year, President George Bush held up Tal Afar as an example of how progress was being made in Iraq after a US army offensive against insurgents. He said the results "gave him confidence in our strategy". The Iraqi government of Nouri al-Maliki ordered a committee to inquire into the killings by the police. The Iraqi security forces generally give their primary loyalty to their own community – Shia, Sunni or Kurd – before the government. They are often involved in sectarian killings but have seldom hitherto carried out pogroms on other communities as happened in Tal Afar.

Estimates of the number killed vary. "I wish you could come and see all the bodies," said a doctor at the local hospital. "They are lying in the grounds. We don’t have enough space in the hospital. All the victims were shot in the head. Between 50 and 55 people were killed. I’ve never seen such a thing in my life."

The killings went on for two hours as policemen roamed the streets looking for Sunni men to kill. Later army troops arrived to stop the massacre.

"The situation is under control now," said Wathiq al-Hamdani, the provincial police chief. "The local Tal Afar police have been confined to their bases and policemen from Mosul are moving there to replace them." The Mosul police are almost entirely Sunni. Some 18 local policemen were arrested after they were identified by surviving Sunnis. By one account they were accompanied in their killing spree by Shia militiamen though these may have been male family members whose relatives had been killed earlier by the bombs seeking revenge.

The tit-for-tat massacres show how easily fundamentalist Sunni groups can provoke retaliation by the Shia. On Saturday, a man detonated explosives in a vest outside a pastry shop in the central market in Tal Afar, killing 10 and wounding three. On Tuesday there was a second more devastating attack when a truck ostensibly giving away wheat flour to make bread blew up as people gathered around to receive it. A few moments later a second truck loaded with vegetables exploded in the nearby central market. Sunni insurgents reportedly waited in ambush on the outskirts of the city intending to ambush the ambulances carrying the wounded to hospitals in Mosul. They were driven off by gunfire.

Tal Afar, an impoverished trading city between Mosul and the Syrian border, has been heavily fought over. It is the only city that is almost exclusively Turkish-speaking Turkoman. But it is politically divided, with the Sunni Turkoman supporting the anti-American insurgents and the Shia Turkoman supporting the government in Baghdad.

There has been a reduction in the number of sectarian killings in Baghdad since the start of the US security plan for the capital. This is largely because the main Shia militia the Mehdi Army has been stood down by its leader Muqtada al-Sadr. Observers believe that sectarian warfare could explode again if the Sunni fundamentalists continue to detonate large bombs in Shia districts without US and Iraqi government forces being able to stop them.

The claim by the Republican Senator John McCain that an American could now walk unharmed through several districts of Baghdad was heard with bemusement by Iraqis. He would certainly be murdered or kidnapped by Sunni insurgents, Shia militiamen or criminal gangs before he had taken more than a few steps.

In central Iraq bombers have started using trucks carrying chlorine in primitive gas attacks. Two suicide bombers driving chlorine trucks blew themselves up outside building in Fallujah west of Baghdad. A US statement said: "Numerous Iraqi soldiers and policemen are being treated for symptoms such a laboured breathing, nausea, skin irritation and vomiting that are synonymous with chlorine inhalation."